Composite "granular metals" have been prepared by co-evaporating an immiscible metal and a non-metal under properly controlled conditions onto a suitable substrate to form an intimate mixture of the two constituent phases where the particle size of the metallic phase is of the order of nanometers. These composite materials exhibit properties which are not only related to the properties of the constituent phases but are also strongly composition and particle-size dependent. However, the nature of the co-evaporation procedure makes it most suitable for the production of thin films of the composite material.